IOC may seek 30KT naphtha for Dabhol

New Delhi: Indian Oil Corp. (IOC) may float a tender next week to buy a June-delivery naphtha cargo for the Dabhol power plant, and it has exercised an option to buy two lots from Trafigura for April and May, an IOC official said on 4 April.

The official said Ratnagiri Gas and Power Project Ltd. had placed a request to IOC to issue a tender for a 30,000-tonne cargo.

“After that, the jetty at Dahej terminal will not be able to receive large cargoes because of the monsoon and also the peak demand period will be over by then,” said the official, who declined to be named.

Last month, India had extended custom duty waiver on naphtha imports for the Dabhol power plant untill the end of September to meet summer demand in the western state of Maharashtra.

“Dabhol owners have said they want to exercise the option to buy two additional cargoes of 30,000 tonnes each from Trafigura to run the plant in April and May,” he said.

Trafigura has agreed in principle and IOC will get a written consent from the trader next week, he added.

Last December, IOC bought five naphtha parcels plus two optional stems, a total of up to 210,000 tonnes, from Trafigura at near $50 a tonne above Middle East quotes via term tender.

But the trading house had not been able to meet IOC’s request for December, prompting IOC to buy two lots via spot tender.